Section 1.3: Recharge Strategy (10%)
- Section 1.1: Full Managed Service Consultancy (20%)
- Section 1.2: Legal Compliance (20%)
- Section 1.3: Recharge Strategy (10%) ← You are here
- Section 1.4: Procurement Strategy (15%)
- Section 1.5: Complaints Management (15%)
- Section 1.6: Handover & Mobilisation (10%)
- Section 1.7: Sustainability (10%)
- Annex 4: Service Matrix (Pass/Fail)
L7 Energy delivers a fully RICS-compliant tenant recharge service underpinned by our Loop platform's unique architecture—a system designed from the ground up to provide complete auditability, transparency, and defensibility in every tenant charge.
Our recharge process is explicitly aligned to the RICS Professional Statement on Service Charges principles:
- Transparency – All calculations visible and explainable at every stage
- Timeliness – Automated workflows ensure billing within defined periods
- Apportionment fairness – Allocation rules validated, documented, and defensible
- Auditability – Complete trail from meter reading to invoice, with versioned calculations
This aligns to the Service Matrix (Annex 4) as applicable.
Unlike traditional energy management systems that overwrite data when corrections are made, Loop implements a CQRS (Command Query Responsibility Segregation) architecture with immutable data principles:
| Traditional Systems | L7 Energy Loop Platform |
|---|---|
| ❌ Readings overwritten when corrected | ✅ Immutable facts - raw readings never modified |
| ❌ Calculations replaced, history lost | ✅ Versioned calculations - all versions preserved |
| ❌ Adjustments hidden in final figures | ✅ Transparent adjustments - separate journal entries |
| ❌ "Trust us" billing | ✅ Full audit trail - who, when, why, evidence |
This architecture ensures every tenant charge is fully traceable from meter reading to invoice.
All meter readings are stored as immutable facts in our system:
- Timestamped meter readings with source identification
- Photographic evidence where applicable
- Quality flags (actual, estimated, suspect)
- Never deleted or modified—corrections create new records
Reading Record:
├── Meter ID, Date, Value
├── Source: manual | AMR | BMS | supplier
├── Quality: good | suspect | estimated
├── Evidence: photo attachment
└── Audit: user, timestamp, deviceEvery consumption calculation follows a transparent three-stage process:
| Stage | Calculation | Purpose |
|---|---|---|
| 1. Raw | End Reading − Start Reading | Verifiable against physical meter |
| 2. Accuracy Adjusted | Raw ÷ Meter Accuracy Factor | Corrects for known meter inaccuracies |
| 3. Normalized | Adjusted × (Period Days ÷ Actual Days) | Fair comparison across billing periods |
Every calculation is versioned (v1, v2, v3...) with full linkage showing what changed and why.
Consumption is allocated to tenants using RICS-compliant methodologies:
- Direct metering where sub-meters exist
- Apportionment based on lease terms (floor area, fixed %, agreed formulae)
- Allocation rules validated to ensure they sum to exactly 100%
- No gaps or overlaps in tenant responsibility periods
Where actual meter readings are unavailable, we propose the following estimation methodology:
| Scenario | Estimation Approach | Disclosure |
|---|---|---|
| Missing read (single period) | Linear interpolation between last actual and next actual read | Flagged as "Estimated" on tenant bill |
| Extended missing reads (2+ periods) | Historical average for same period in prior year, adjusted for degree days | Flagged with methodology note |
| New tenant (no history) | Building average for similar use type × tenant floor area | Disclosed as provisional; trued-up on first actual read |
| Faulty meter | Last known good consumption profile until meter replaced | Clear disclosure; priority remediation |
All estimates are:
- Clearly marked on tenant invoices
- Subject to true-up when actual reads become available
- Reported separately in monthly MI to REM
- Documented with methodology for audit purposes
For communal heating systems (LTHW/CHW), distribution losses must be fairly apportioned. We propose:
| Method | Application | Rationale |
|---|---|---|
| Pro-rata by metered consumption | Default approach | Tenants using more heat bear proportionate share of losses |
| Pro-rata by floor area | Alternative where consumption varies significantly | Fairer where some units have different heating patterns |
| Fixed % allocation | Where lease specifies | Compliance with contractual terms |
Loss calculation:
Total Heat Purchased (fiscal meter) - Sum of Tenant Consumption (sub-meters) = Distribution Loss
Tenant Loss Share = (Tenant Consumption ÷ Total Tenant Consumption) × Distribution LossTransparency commitments:
- Loss % reported monthly to REM and flagged if exceeding benchmark (typically 10-15%)
- High losses trigger investigation and remediation recommendations
- Tenants receive itemised bills showing: metered consumption + loss allocation
- Methodology documented and available to tenants on request
When corrections are needed, we never modify original calculations. Instead:
- Adjustments recorded as separate journal entries
- Mandatory reason codes and supporting evidence
- Approval workflow for significant adjustments
- Original calculation preserved for audit
Final Billable = Calculated Consumption + Approved Adjustments
Example:
├── Calculated (v2): 46,412 kWh
├── Adjustment: +120 kWh (supplier reconciliation)
├── Reason: "Invoice #INV-2025-04-12345 variance"
├── Approved by: [Finance Manager]
└── Final Billable: 46,532 kWhBilling periods follow a controlled lifecycle preventing accidental changes:
DRAFT → ACTIVE → LOCKED
Draft: Period being set up, calculations in progress
Active: Open for review and adjustments
Locked: Finalized for billing, protected from changesOnce locked, periods cannot be automatically modified—any changes require explicit approval and create full audit trails.
Invoices are generated with:
- Clear breakdown of consumption and charges
- Reference to calculation version used
- Transparency on any adjustments applied
- Supporting tariff and rate information
- Period and meter details for verification
The RICS Professional Statement on Service Charges requires:
| RICS Requirement | L7 Energy Compliance |
|---|---|
| Transparency | Three-stage calculation visible at every step |
| Accuracy | Multi-stage validation, meter accuracy correction |
| Timeliness | Automated workflows, period management |
| Audit Trail | Immutable facts, versioned calculations, adjustment journal |
| Dispute Resolution | Can recreate any historical calculation with full evidence |
| Fairness | Validated allocation rules, pro-rata adjustments |
Note: Outcomes vary by metering configuration, lease arrangements, and occupancy profiles. Detailed evidence can be shared on request under NDA.
Client: 45-storey mixed-use development (hotel, office, residential)
Challenge:
- Legacy recharge methodology treating all uses equally
- Residential tenants disputing charges based on hotel's 24/7 operation
- Recovery rate: 78%
L7 Energy Solution:
- Implemented use-type differentiated allocation based on actual consumption profiles
- Installed additional sub-metering at use-type boundaries
- Applied time-of-use weighting reflecting operational patterns
- Full audit trail enabled tenant-by-tenant explanation of methodology change
Results:
- Recovery rate improved to 94% (target; +16% vs baseline)
- Residential disputes reduced by approximately 85%
- Hotel accepted fair share based on transparent evidence
- Landlord benefit: £127,000 additional annual recovery
- Tenant benefit: Fair, evidence-based charges; reduced disputes
Client: 280-unit Build-to-Rent residential scheme
Challenge:
- Original billing based on floor area apportionment
- No individual consumption visibility
- Residents unable to control or understand charges
- Recovery rate: 82%
- High complaint volumes
L7 Energy Solution:
- Transition to heat cost allocator (HCA) based billing
- Implemented Loop's immutable reading capture with photographic evidence
- Developed resident-facing transparency portal showing individual consumption
- Created adjustment framework for communal/distribution losses
Results:
- Recovery rate improved to 97% (target; +15% vs baseline)
- Resident complaints reduced by approximately 70%
- Average resident bill reduced by approximately 12% (behavioural change)
- Landlord benefit: £89,000 additional annual recovery; Heat Networks Regulations 2025 ready
- Tenant benefit: Control over consumption; fair individual billing; transparency
Client: 6-building London office portfolio
Challenge:
- Annual supplier reconciliation creating billing volatility
- Tenants disputing retrospective adjustments
- £340,000 in disputed reconciliation charges
- No clear audit trail linking supplier bills to tenant recharges
L7 Energy Solution:
- Implemented Loop's versioned calculation system linking:
- Original estimates → Actual readings → Supplier bills → Tenant charges
- Created reconciliation adjustment workflow with:
- Automatic variance detection
- Evidence attachment (supplier invoices)
- Approval routing
- Tenant notification with explanation
- Established monthly accrual process reducing year-end volatility
Results:
- Disputed charges reduced from £340,000 to approximately £45,000 (target; −87%)
- Reconciliation cycle time reduced from 6 weeks to 8 days
- Recovery rate improved to 96% (target; +11% vs baseline)
- Landlord benefit: £295,000 previously disputed charges now recovered; faster cash flow
- Tenant benefit: Predictable charges; clear explanations; evidence-based adjustments
Our Loop platform's immutable facts and versioned calculations architecture delivers:
✅ Complete Auditability – Every charge traceable from meter to invoice
✅ RICS Compliance – Transparent, accurate, timely, defensible
✅ Dispute Resolution – Recreate any historical calculation with full evidence
✅ Heat Networks Regulations Ready – Ofgem-grade transparency and consumer protection
✅ Improved Recovery Rates – Typical improvement of 10-15%, subject to baseline and data quality
✅ Reduced Complaints – Typically 50-80% reduction through evidence-based billing, where evidenced
This is not just energy management—it's a fully auditable, legally defensible billing system designed for the regulatory environment REM operates in.
[End of Section 1.3]
Previous: ← Section 1.2: Legal Compliance
Next: Section 1.4: Procurement Strategy →